On March 22, 2022, Xiaomi Group announced its 2021 annual results. In 2021, despite the global shortage of core components and the continued impact of the new crown epidemic, Xiaomi achieved significant growth in revenue and profit for the whole year. According to the financial report, the group's total revenue reached 328.3 billion yuan (the same below), an increase of 33.5% year-on-year. Adjusted net profit was RMB22 billion, up 69.5% year-on-year. Adjusted net profit margin was 6.7%, up 26% year-over-year. In the fourth quarter of 2021, Xiaomi Group's total revenue reached 85.6 billion yuan, an increase of 21.4% year-on-year, and adjusted net profit reached 4.5 billion yuan, an increase of 39.6% year-on-year.
High-end mobile phone shipments doubled
In terms of business, in 2021, Xiaomi's smartphone revenue reached 208.9 billion yuan, an increase of 37.2% year-on-year, due to the double increase in sales volume and average selling price (ASP). Xiaomi's global shipments and market share of smartphones reached a record high, of which the global shipment of smartphones reached 190 million units, an increase of 30% year-on-year. Xiaomi's high-end smartphones (priced at 3,000 yuan or more in Chinese mainland and 300 euros or more overseas) shipped more than 24 million units worldwide, doubling from the full year of 2020 and accounting for 13% of total smartphone shipments. Shipments of high-end smartphones priced at €300 or more abroad increased by more than 160% year-on-year. ASP rose to $1,097.5 from $1,039.8 last year. Benefiting from the increase in high-end smartphone shipments, the gross margin of the smartphone segment increased to 11.9%.
Nandu reporter noted that the increase in shipments has brought a series of chain reactions to sales growth and further stimulated the vitality of MIUI users. In December 2021, global MIUI monthly active users increased by 28.4% year-on-year to 510 million. In 2021, the global net new MIUI monthly active users reached 113 million; based on the continuous growth of the number of MIUI users and the further improvement of the penetration rate of overseas high-end products, Xiaomi's Internet service business revenue in 2021 increased by 18.8% to 28.2 billion yuan, of which advertising business revenue reached 18.1 billion yuan, a year-on-year growth rate of 42.3%.
Revenue of each business segment of Xiaomi Group
The automotive R&D team has more than 1,000 people
In terms of IoT business, in 2021, Xiaomi's revenue from this business reached 85 billion yuan, an increase of 26.1% year-on-year. According to the financial report analysis, this is mainly due to the increase in sales of smart TVs, Xiaomi Tablet 5 Series (launched in August 2021) and smart air conditioners.
Xiaomi continues to promote the core strategy of "mobile phone ×ALoT". The number of Xiaomi AIoT connected devices (excluding smartphones, tablets and laptops) has reached 434 million, an increase of 33.6% year-on-year, and the number of users with five or more connected devices to the Xiaomi AIoT platform (excluding smartphones, tablets and laptops) has reached 8.8 million, an increase of 40.4% year-on-year. In December 2021, The monthly active users of XiaoAi Classmate increased by 23.3% year-on-year to 107 million, and the monthly active users of Mijia App increased by 42.0% year-on-year to 63.9 million.
In addition, Xiaomi's financial report also revealed that by the end of 2021, a total investment of more than 390 companies, with a total book value of 60.3 billion yuan.
For the smart car business that the outside world is concerned about, the financial report shows that since the announcement of the car-making plan in March 2021, Xiaomi's smart electric vehicle business has progressed more than expected. The automotive business R&D team of more than 1,000 people will continue to expand R&D in core areas such as autonomous driving and intelligent cockpit in the future. Xiaomi Auto is expected to be mass-produced in the first half of 2024.
In terms of profits, the financial report mentioned that from 2018, Xiaomi promised users that the comprehensive profit margin of the overall hardware business (including smartphones, IoT and consumer products) would not exceed 5% every year. In 2021, the overall profit margin of Xiaomi's hardware business is positive and less than 2%.
Proposed repurchase of up to HK$10 billion
Lin Meibing, chief analyst of Wit Display, analyzed that the overall performance data of Xiaomi in 2021 is eye-catching, but there is still a certain distance compared with the high-end target set, such as some high-end models of Xiaomi increasing sales through price reduction, and the average price of smart phones only increased by 57 yuan.
After the release of the financial report, Xiaomi issued an equity repurchase announcement, saying that the board of directors formally resolved to exercise the share repurchase authorization to buy back shares in the open market at an irregular rate of up to HK$10 billion.
As of March 22, Xiaomi's share price was HK$14.2 per share, still below the issue price of HK$17. Lin Meibing said that due to Xiaomi's low profit margin, the stock price expectations will not be too high. Xiaomi cars may be an opportunity, if there can be explosive products in 2024, it is possible to improve Xiaomi's profit margins, but also test Xiaomi's car-making technology.
Written by: Nandu reporter Ye Lu